City and utility officials throughout Southern California are eyeing a new system that relies on ice to store energy for air conditioners as a possible way to cut peak commercial consumption and reduce the threat of crippling blackouts.

"There's an old saying, a kilowatt saved is more valuable than a kilowatt built," said Bill Carnahan, executive director of the Southern California Public Power Authority, an organization of municipal power agencies.

Cutting power use now could delay the need to build new plants, he said. At least 11 members of the association - including Anaheim, Burbank, Riverside and Azusa - are testing the new technology as a way to weather power shortages during scorching weather. State power consumption reached a record 50,270 megawatts on July 24 during the height of a triple-digit heat wave.

The system developed by Ice Energy Inc. consists of a large plastic attachment for commercial air conditioning units that is filled with water, frozen overnight then used to cool refrigerant during the day.

"It stores energy at night, when energy is cleaner to produce, cheaper to buy and easier to obtain, and it makes it available for use during the day," said Frank Ramirez, CEO of Ice Energy, based in Windsor, Colo.

The new hardware costs about $10,500 and weighs about 5,000 pounds when filled with water. There can be an additional retrofitting cost of as much as $10,000 for existing buildings and a minimum $750 cost for new construction, the company said.

A residential model is currently being tested by the company. The system has been in place since 2004 at an Anaheim fire station, where an analysis showed a 95 percent drop in peak energy usage and a 5 percent overall reduction, said Mariann Long, assistant general manager of Anaheim Public Utilities.

This week, the Anaheim City Council approved a package of incentives hoping to increase commercial use of the system. "By shifting load to off-peak, the power is cheaper, so our costs can be stabilized or go down," Long said.

The incentives include a special rate structure that will benefit businesses by dropping their cost for power during off-peak hours from 11 cents to 3 cents a kilowatt. The city will also issue credits of as much as $21,000. Ice Energy has sold 75 systems since sales began six months ago. The California Energy Commission authorized use of the technology in the state in June. The desert community of Victorville is buying 54 systems and plans to retrofit its municipal buildings with the help of low-interest loans from the commission, Ramirez said.

Ice Energy is also negotiating with a few national retail chains to provide systems for their stores, he said. The idea behind the system is not new. University of California, Riverside has a massive thermal energy storage complex connected to its air conditioning system. The challenge was creating something smaller for commercial and residential units.

Jim Detmers, vice president of operations for the California Independent System Operator, which manages the state's power grid, said the technology appears to be a step in the right direction. "I won't go so far as to say it will eliminate blackouts," he said. "It's a good step."


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